This page has been archived and commenting is disabled.
The U.S. Economy is Dead
For the past quarter century; the most effective “stimulus” for the U.S. economy has been a fall in gasoline prices. This is no great surprise, given that the United States had been the most gas-guzzling nation on the planet – and by a wide margin. But times have changed!
After Barack Obama publicly admitted that the U.S. government had ruthlessly manipulated oil prices lower, as “part of its strategy” of economic terrorism against Russia; global oil prices have been cut in half. The only other time that oil prices have fallen so far or so fast in the last quarter century was the brief/temporary collapse in prices which accompanied the Crash of ’08.
Has this enormous economic stimulus kick-started the U.S.’s zombie economy? Not at all. Indeed, the collapse in the U.S. retail sector has accelerated throughout this plunge in oil/gasoline prices. This should not be possible. Economic stimulus from lower prices (in any sector) is supposed to be automatic.
What does it mean when an economy not only fails to respond to “automatic” stimulus, but continues to rapidly decompose? It means we are dealing with a deceased economy. This is a “surprise” to the irredeemable charlatans who have the audacity to call themselves economists, but it shouldn’t have been. Not if any of them were paying attention. Not if any of them lived in the real world.
Back in the real world; evidence of the U.S.’s zombie economy is both overwhelming and abundant. It begins with 0% interest rates. As has frequently been noted in the past; 0% interest rates are the economic equivalent of a defibrillator. As with a defibrillator; it is the most-extreme form of stimulus known to us. As with a defibrillator; it is a “therapy” option which is so radical/reckless that it is only ever intended to be used as a last resort, to resuscitate a patient on Death’s door.
Equally, as with a defibrillator; if it doesn’t “work” right away, it will never work (has anyone ever heard of a nation called “Japan”?). When a doctor attempts to resuscitate a patient with a defibrillator, and fails after a couple of minutes; does he continue to jolt the patient, again and again and again and again – year after year? Of course not. He quickly gives up, because it has become evident that he is no longer “treating a patient”, but merely charring a corpse.
This is what the U.S. government (and other Western governments) has been doing for the past 6+ years with its 0% interest rate: charring a corpse. Further proof that the U.S. economy is already dead comes from a chart of the heartbeat of the U.S. economy (and any capitalist economy) – it’s “velocity of money”.
As we see; the U.S. “heartbeat” (i.e. the flow of money) has nearly stopped, having fallen further/lower than at any time in recorded history. What does it mean when money stops moving, in a “capitalist economy”? What does it mean when the money (i.e. blood) stops moving in the heart of the greatest Capitalist Empire the world has ever seen? R.I.P.
But there is even further, equally overwhelming proof that this gas-guzzling, consumer economy is dead, and it comes from the gasoline consumption numbers, themselves. “Official” U.S. gasoline consumption hasplummeted by nearly 75% from its absolute peak in July of 1998. More pertinently; the gasoline consumption numbers have plummeted by roughly 66% since the start of the U.S.’s (imaginary)“recovery”.
What does it mean when the gas-pumps stop being used in a gas-guzzling economy? It means the same thing as when the money stops moving in a capitalist economy, or when a “patient” fails to respond to a defibrillator. R.I.P.
This brings us to the ghastly train-wreck known as “the U.S. retail sector”, the cornerstone of thisconsumer economy. Regular readers are already familiar with the “Black Friday Shopping Massacre” in the 2014 U.S. holiday shopping season. Yet despite that horrific 20+% (year-over-year) collapse in U.S. holiday shopping; the “news” from the U.S. retail sector has gotten much, much worse since that initial plunge.
It began with an equally large/ugly collapse in December retail sales. When adjusted for inflation, and expressed as an annualized number; the “0.9%” drop reported by the statistical liars of the U.S. government translates into a 25% plunge in December retail sales – even worse than the Black Friday collapse.
Equally important, and as noted in a recent commentary; these horrific plunges in U.S. retail sales arecumulative. After retail sales collapsed at the end of November, it collapsed by an additional (annualized) 25% in December. And now, as we move to January and a new year; we see yet another, sickening plunge in U.S. retail sales – even as gasoline prices continue falling.
The “advance estimate” of U.S. January retail sales reports another, enormous, cumulative drop. The “-0.8%” fantasy-number reported by the U.S. government translates into another, additional (annualized) collapse in excess of 20%.
With U.S. gasoline prices now hovering just above $2/gallon; this represents roughly a $1.50/gallon plunge from average prices through most of 2014. In other words; (for the first time) Big Oil has chosen to pass along to consumers nearly the entire plunge in crude oil prices, in the form of lower gas prices. Yet despite this massive stimulus to the U.S. economy; the U.S.’s pauper consumers haven’t even been able to maintain their level of spending.
Supposedly, their wallets are all full of the dollars they have been saving from dramatically lower gasoline prices. Yet outside of gasoline purchases; Americans continue to buy less of everything else. So-called “core retail sales”, which excludes (among other things) gasoline consumption, fell in January by nearly 10% when adjusted for inflation and annualized.
The near-bankrupt consumers (in this near-bankrupt economy) don’t have “more dollars” in their wallets thanks to the huge plunge in gasoline prices, they have simply been going further into debt at a slower rate. The only “benefit” the U.S. economy has received from (much) lower gas prices is that this corpse is decomposing at a slower rate than it would have, if the U.S. government had not manipulated oil prices lower.
Yet note what the liars/charlatans expect us to believe (inside and outside the U.S. government). In theirfantasy-world; despite the horrific and unprecedented collapse in U.S. retail sales in November and December, we’re supposed to believe that “consumer spending” for the fourth quarter (as a whole) rose by 4.3%.
In the Wonderland Matrix fabricated by these liars; the faster U.S. “retail sales” fell each month, the faster U.S. “consumer spending” rose for the whole quarter. It’s exactly the same as someone claiming to have traveled downhill in order to get to the peak of a mountain. It’s not simply a lie, it’s a ridiculous lie.
It is precisely these sorts of perverse, utterly absurd lies which will inevitably shatter the brainwashing which the One Bank (puppet-master of the U.S. government) has laboured so diligently to perfect over the past several decades. Yet what choice does it (and its media/government puppets) have?
Ultimately any lie one uses to attempt to cover-up a corpse is quickly perceived to be ridiculous and/or perverse, for one, simple reason. Corpses tend to smell very bad, very soon. Soon the stench emanating from the U.S. zombie economy will be so overpowering that it will be perceptible even to the deadened senses of its zombie population.
»
- advertisements -
From the article: "Poverty is the worst form of violence."
B.S.
Socialism is the worst kind of violence because it leads to poverty, mass slaughters, fascist/totalitarian states, and on, and on, and on...
Having rendered the much-violated Constitution into a dead letter, it was the Roberts decision that spelled the end of the United States, for me, as a legitimate government. And with all that has come to light since, with the Snowden data dump outing the NSA for instance, has anything changed? Not a thing except TPTB's brazenness. "Yeah well, and fuck you. Whaddaya gonna do about it?"
Add a balanced budget amendment for FEDGOV, State gov and all cities / towns to your list. All those measures you listed are temporary fixes as long as the taxpayers are on the hook for unlimited growth of Gov.
I agree.
i guess you all know about this, not that much was believable from the MSM before, of course it wasn't its own Bill, stuff like this gets added on to another Bill, be it totaly unrelated, and then its kept quiet
US Govt. Has NOW Made Propaganda Legal!!https://www.youtube.com/watch?v=xmA_sVaSWrI
Old news.
+1000
all good things you propose, although it will never happen under the current secret cabals now in charge, it is a dream.
with ObummerCare costing each taxpayer $50K in real terms, the bank is broke. They are treating spending on healthcare as consumer spending, roflmao!!!
I would add to your list, repeal NDAA, Patriot Act, NAFTA, GATT, Dodd-Fwank and dismantle the alphabet soup agencies!
What about the biggest elephant in the room? Remove the Fed and let the treasury issue money at no interest to the govt.
I can't believe I left off the biggest fish...the illegal Fed...that too man!
How man articles must be written to say the same thing over last 5 years and here we are with the markets at record highs and the prez says best year in US history. Can we just get this over with already
Reagan fed USSR, Obama a recession
Reagan killed the USSR, by spending BIG on the MIC, when the communists followed suit, it broke them. Reagan did start a debt bubble, yes, but he sure did kick the communists asses without firing a shot.
Obamao is like FDR, and took a resession and made it a depression!
USSR ate itself. Reagan simply threw some oxygen on the fire by arming OBL and his jihadists.
We fired shots at the communists through proxy wars...and look we are becoming more communist by the day...as is expected. The outcome of the initiation of force is the exact opposite of stated intent. We enslaved our own soldiers to free other people from tyrants abroad?
What about the tyrants in our own borders?
What the USA actually did was give them fast-acting poison while taking slow-acting poison ourselves at the same time. Unexpectedly, they survived and now are back leaner and meaner and the USA is the one with the debt bubble about to collapse.
Lol! I've heard that one before!
"Obama publicly admitted"... lol, I stopped reading there.
Well, here is my plan: I am taking the $$$ saved off gas, putting 1/3 into Ag (Au is on hold) and the rest I am stashing for moar land.
I paid off all my debt a while back.
And, here is another scam I have encountered: we paid off the XYL's (ham jargon) car. We got the title. But, Wachovia ()&%$&!) did not release the lien to the DMV! Never heard of such a thing! Does this mean a Title means nothing? Correct, according to the DMV!"Sorry, the bank did not rlease the lien to us, the DMV." Now, I have to go get a Magistrate's release.
Down with the Banksters!
>>>Now, I have to go get a Magistrate's release.
Fortunately, the more paperwork processed, the higher the GDP. With any luck, your dealings with the Magistrate's office will drag on for many months, leading to a modest improvement in your local economy.
If you think I'm joking, just remember how Obamacare compliance spending boosted US economic growth in Q4.
Now, go break some windows.
naw, just replace a fine window. wouldn't want to get hurt cleaning up broken glass. opps, on second though break it, call the epa, and osha to make sure everything gets done in compliance. and start an investigation into cause, it could be terrorism rooted in anger. bring in the fornenSIC team too. could be domestic violence. quarenten the 4 block radius. detain all residents and question them. oh i just touched the tip on the berg...
Please, 200+ years of contract law is now meaningless. That should have been clear to you in 2008/2009.
possesion is now 10 10ths of the law. Lead is the only working contract.
Save the APITs for high value targets. Lead core copper jacketed for all else. At 3000 fps it does not matter on soft targets. That's how a 200 lb human is able to kill a 2,000 pound bear. Supersonic internal damage is devastating.
toxic shock
Nice portfolio allocations but damn, you must buy a lot of gas. My $$$ saved off gas go into parking meters.
Also, you are not actually supposed to pay off your car loan. That's probably why they didn't have a procedure for it at the bank.
lol I can see it now. You go into a bank to pay off your car loan, and the 20 year old clerk gets a puzzled look on her face, freezing like a deer in headlights. She says, "let me talk to the manager".
She goes to the 25 year old manager, and he does the same thing to her, then says "stall them while I make some calls".
He then calls some district or bank manager and says, "Some deadbeat asshole is down here PAYING OFF a car loan, what should I do?" "What is this Title thing he keeps referring to?" lol
The upper management tells him to take the money, and they'll send him a Title within 160 business hours.
Goldman Sachs finds Sprott's lack of faith disturbing...
when DO we blow up the death star?
"He's dead, Jim."
All that is left is the Stock Market.
And what killed it is an OD of Keynesian "stimulus." We've pulled forward so much demand that there just isn't that much available to keep pulling forward anymore. And the decline in the Labor Force Participation Rate tells the story (as does the business birth death ratio). Until we get business startups exceeding closings and the LFPR back up to more reasonable 70%ish levels, the poor and unemployed don't buy much more than food, booze and shelter (which is about the only place you see price strength due to demand pressures) so the punk retail sales data is going to be the norm.
Effing Keynesian charlatans...
Well, that article was so simple even a cave man could understand it.
splain it to me lucy
charred corpse, hmmm -i get it.
like continuing to shoot at something already dead.
or continuing to turn the key when the battery is dead.
no velocity, hmmm-where did all that money go?
geez, must be fibulating in dc, ny and london, just guessing...
Hey now!
And that also explains why the retail sector created so many new jobs in January, according to BLSBS data?
Speaking of statistical BS, although I use M2V as a mental measure/benchmark for judging my perceptions of the real world "economy", I wonder what the velocity of money would look like with a GDP that is not a FED/.gov manipulated component of the ratio. I wonder if Shadowstats has a different M2V. Anyone? with a J Williams subscription?
post coital twitching phase
The beatings will continue until moral improves!!
I just got back from my tax preparer. I'm spending less and paying more. How am I expected to buy more at the retail outlet when the Feds take it?
Since when did lowly CPAs (not tax attorneys) start charging a minimum of $75/hr and up for some basic questions around a home office and basic LLC questions I have? One guy got pissed because I balked at his $125/hr price quote.
SOZ-"How am I expected to buy more at the retail outlet when the Feds take it?"
You are supposed to take out your Chase credit card and charge it silly.
Duh.
I can't wait to see my return, I guess I'll owe another $6K this year, sigh!
I work for myself and tax season is extra fun. My accountant keeps telling me all the little fuckings I'm going to take this year and I can barely contian my excitement......
Me too, but the f'ing govt is finding more ways to rape me!
No shit. This year my wife and I were able to itemize and beat the standard deductions, and with only 2 witholding allowances claimed we still owe the Feds money.
Time to reduce that economic footprint. Only the producers need "Go Galt."
Gasoline is $2.87 for regular unleaded in San Diego.
$2 Gas is a Pipe Dream...for us.
They stick it to us all of the time.
Oh. I know that in Norman is may be sub $2. But Norman is bankrupt...for the most part.
Regular is $1.97 in Austin, but that's not the point.
Obamacare is the new Apple, don'tcha see?
The Federal tax code has been plundering the middle class. The various statutory deductions have never reflected real life, only the Federal thirst for more $$$$$$. The reason the middle class turned into a two income household was because the inflation tax in the (sub-)standard deduction meant that one wage earner coud not feed, clothe and house a family. The enormous federal overspending since the Great Society has not eliminated poverty, it has enlarged it via currency debasement and highly regressive income taxes.